India has sought an additional 3-4 million tonne liquefied natural gas (LNG) a year from Qatar but talks were stuck today over pricing of the fuel.
Petronet LNG, which at present imports 7.5 million tonne a year of LNG from Qatar under a long-term contract, sought an additional 2-3 million tonne while state gas utility GAIL India wanted 1 million tonne for 20-25 years.
The world's largest LNG exporter was ready to supply all of the requirement, but wanted a price of $16 per million British thermal unit, sources privy to the negotiations held during the visit of Qatar's Energy Minister Mohammed bin Saleh Al-Sada here.
Qatar sought a price of 15-16% of Japanese Crude Cocktail -- the average price of customs-cleared crude oil imports into Japan, while New Delhi was willing to pay no more than 14.5% of JCC.
JCC at present is less than $105 per barrel and at these levels the price sought by Qatar translates into $15.75-16.8 per mmBtu. India offerred $15.225 per mmBtu.
Sources said India was willing to pay a price equivalent to what it is paying Exxon Mobil Corp for buying 1.5 million tonne a year of LNG under long-term contract from Australia's Gorgon project.
More From This Section
RasGas of Qatar now supplies 7.5 million tonne a year of LNG under long-term contract at a price indexed at 12.67% of JCC.
Qatar, they said, has been asked to make the final offer.
LNG is natural gas liquefied at sub-zero temperature that can be transported in cryogenic ships.
Sources said Petronet wants additional LNG from 2013 at its Dahej terminal in Guajrat whose capacity is being expanded to 15 million tonne a year from current 10 million tonne, as well as at the under-construction 5 million tonne a year terminal at Kochi in Kerala.
GAIL wants LNG at its almost ready import facility adjacent to the Dabhol power plant in Maharashtra.
To lure Qatar, New Delhi offered the Gulf nation equity in petrochemical plants that Oil and Natural Gas Corp (ONGC) is putting at Dahej in Gujarat and Bharat Petroleum Corp is planning at Kochi.
Also, Mangalore Refinery and Petrochemical's proposed chemcial complex was also offered for equity participation during talks held over two days.
Besides offering additional LNG, the visiting Qatari Minister also offered to supply LPG and crude oil condensates which can be processed to produce white fuels like petrol, kerosene, ATF and naphtha.